Under The Radar News - Monday

• Bunge soaking up cash. Soybean and fertilizer giant Bunge (BG) is burning cash at a record pace. Soaring soybean and commodity prices, which should benefit Bunge (and have seen shares double over the past two years), are actually crushing the company due to its hedges, which are forcing Bunge to borrow at record rates. 2007 cash flow was -$411M, vs. -$289M in 2006 -- and it has already used another $353M in cash this year. In 2007, Bunge added $1.6B to its debt, bringing the total to $4.2B. The company's woes are complicated by the fact that soybean farmers are being squeezed by record fertilizer prices, resulting in defaults on their obligations to Bunge.
• EnCana gushes on breakup plan. Shares of EnCana (ECA) are up 7% after it announced plans to split into a natural gas company and an integrated oil-sands producer. Based on a sum-of-parts analyst, UBS analyst Andrew Potter thinks the company could be worth C$110/share, vs. the C$93 it was trading at this morning.
• Herbalife whistleblower. Former Herbalife (HLF) Director of Venezuela and Colombia, Ricardo Hollander, says employees of the company are committing fraud by falsifying their official addresses in order to get paid in the currencies of Columbia or Panama despite living in Venezuela. He says he was fired for reporting the illegal activity to his supervisors, and has been stonewalled by the company's human resources department.
• iPhone to hit Asia. Apple (AAPL) agreed to distribute the iPhone in Asia and Australia through four companies. SingTel will sell the iPhone in Singapore, Bharti Airtel in India, Globe Telecom in the Philippines and Optus in Australia. The iPhone will go on sale in Asia sometime this year. The agreements are not expected to be exclusive, and other carriers could still sign on.
• Fannie preferred offering. Sources say Fannie Mae (FNM) will market an issue of preferred shares worth at least $1.5B today, with a dividend yielding 8.25%. Fannie said last week it would raise at least $6B in fresh capital. Fannie also said it will sell $2B of three-month benchmark bills due Aug. 13, 2008, and $1.5B in six-month bills due Nov. 12, 2008, in a Dutch auction Wednesday.
• Friendly move. Sources say Google (GOOG) is set to launch a new set of APIs that allow Open Social participants to pull profile information from social networks. The protocol, called "Friend Connect," is thought to be similar to MySpace's (NWS) Data Availability and Facebook's Facebook Connect.
• Nvidia denies interest in Via. Nvidia (NVDA) says it is not looking at buying VIA technologies. "They don't need our money. I don't need theirs," Huang said. "They're doing fine. People want to create drama." Via makes chipsets for x86-based computers. "Our shtick is that we just focus on one thing," says Huang. "We said we're a visual computing technology company and we're completely focused on this."
• ADM faces criminal charges. Archer Daniels Midland (ADM) disclosed it is under criminal investigation by the EPA for wastewater-discharge practices at a Missouri facility.
• Power plant plan fizzles. BP (BP) and Rio Tinto (RTP) cancelled a plan to build a $1.5-2B coal-fired power plant in Australia. The plant was canned after the firms discovered rock formations in the area would not fully seal-in carbon dioxide deposits.
• Strikes hurt GM dealers. General Motors (GM) dealers say parts shortages and a lack of inventory due in part to the UAW strike against American Axle & Manufacturing (AXL) is causing clients to wait indefinitely for custom cars. GM says the strikes haven't broadly impacted individual retail sales.
• Turning up the heat on energy trading. A House committee is probing energy-market speculation, sources say. Regulators believe hedge funds and investment banks may have played a role in driving crude oil prices to record highs.

Comments

[GOLD]

Eli I don't know how to reach you directly. TNK Wednesday announce may look something like this.


TNK presentation

Q1 EPS = $0.76
YRLY EPS = $3.04

The company just bought two new Suezmax tankers on credit and you can see that the profits will go up based upon this purchase and the currently highly spot rates. Download the guidance chart from TNK directly.

link to divided payout schedule (guidance chart) based upon spot rates
www.teekaytankers.com/...
download 48kb 3 page file and look at dividend spreadsheet.

Here is the data you need to do the calculations - this data was acquired from a professional source confirmed to be accurate with TNK.

04/04/08
VLCC $95,263
SUEZMAX $60,471
AfraMAX $41,447

I watch and record the weekly spot averages for all tanker types.
The above list is the Average tanker daily spot rate as of the end of Q1. Q2 is higher already.


Here is the latest average including every week from Jan 1 to today.
05/02/08
VLCC $96,718
SUEZMAN $72,152
AFRAMAX $46,545

For those of you too lazy to download this critical guidance here is the brief summary.

Current Q1 spot rates

20,000 = dividend $1.64
25,000 = dividend $1.99
30,000 = dividend $2.34
35,000 = dividend $2.69
40,000 = dividend $3.04 ***** here we are

Download the full chart to see how the two new suezmax tankers effect income (its dramatic).

[RichardSchweitzer]

Looking at the 10Q of BG, it's not clear how they price the inventory of hard soy they carry. It is possibly understated at resale values, which may give them some fall-back on hedging. Big question?